NEW YORK (AP) — Shares of True Religion Apparel Inc. plummeted nearly 15 percent before the market open on Wednesday as the clothing company's second-quarter revenue performance missed Wall Street's expectations. It also cut its full-year earnings guidance and lowered the high end of its revenue outlook.
Late Tuesday True Religion, which is known for its high-end jeans, reported that its quarterly revenue rose 7 percent to $104.9 million from $98.3 million, but the results were short of the $107.4 million that analysts polled by FactSet predicted.
Ronald Bookbinder of Benchmark said in a client note that the company's problems occurred at its full-price stores as new, simpler styles that were priced higher than its rivals' offerings did not sell well.
The analyst lowered True Religion's price target to $32 from $38 and reiterated a "Buy" rating.
Citing its quarterly performance and current market conditions, True Religion lowered its full-year earnings forecast to a range of $1.80 to $1.86 per share. It previously expected $1.88 to $1.95 per share.
True Religion also reduced the high end of its revenue guidance. The company now anticipates revenue between $450 million and $455 million. Its prior outlook called for revenue between $450 and $460 million.
Wall Street is looking for earnings of $1.97 per share on revenue of $467.1 million.
Citi Investment Research's Susan Anderson dropped True Religion's price target to $27 from $29. The analyst said that the Vernon, Calif., company revised its full-year guidance because of slower growth in U.S. retail sales and abroad.
Anderson says the outlook now seems "conservative enough to account for weaker international results and more modest U.S. spending."
The analyst kept a "Neutral" rating.
True Religion's stock fell $3.90, or 14.9 percent, to $22.34 in premarket trading.
